Clause
17
Regulations to
deal with joint ownership, joint occupation or
death Question
proposed, That the clause stand part of the
Bill.
John
Healey: This is a fairly straightforward clause. It
enables us as a Government to set some practical arrangements on how
levying authorities should deal with a business rate supplement in
relation to properties jointly owned or occupied. It also allows them
to make arrangements in cases where the person who is liable for the
business rate supplement has died. The provisions will be technical in
nature; they will mirror powers that already exist in relation to
non-domestic rates; they are designed to ensure that it is clear where
the liability for BRS falls in very specific circumstances. I think it
therefore appropriate to deal with this in secondary legislation. The
clause gives us the power to make those regulations, and I can reassure
the Committee that no provisions made under them will affect the level
of the liability due in respect of a
property. Question
put and agreed
to. Clause
17 accordingly ordered to stand part of the
Bill.
Clause
18Notice
to billing authorities before start of financial
year
Dan
Rogerson: I beg to move amendment 18, in
clause 18, page 12, line 41, leave
out ‘March’ and insert
‘January’. The
amendment seeks to examine the question of when the billing authority
gets formal notice of the intention to charge a levy. My understanding
of the Bill is that the levying authority has until the end of February
in the calendar year in which the BRS will come into force, which is in
the April. That is a concern because when people are given late
deadlines, things can creep towards it; my thought is to bring that
deadline back to the start of the calendar year so that the billing
authorities have more notice. I say that because, for example, where a
ballot is to be held, and it is not clear whether the BRS will go
ahead, it may take the billing authority a considerable amount of work
to put things in place in order to enact it. It is a straightforward
amendment that allows the billing authorities a little more leeway in
getting prepared for things to run smoothly when the BRS comes in at
the beginning of the financial year.
Robert
Neill: I apologise for not having welcomed you to the
Chair earlier, Mrs. Dean, on behalf of myself and my hon.
Friends. We are delighted to see you, as are all the other members of
the
Committee. I
have much sympathy with the amendment. It may be that March is used
because it is a standard date in local government legislation. I served
on a London borough council, which is a billing authority, for a number
of years and talked to many others who are on billing authorities. I
remember, therefore, the frustrations one often had when there was a
precepting authority that went right up to the deadline in fixing its
precept.
That caused difficulty for the second-tier authorities in working out
their budgets. The circumstance here is similar; putting back the
deadline would make it easier for people to plan and get things in
order. The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Sadiq Khan): I, too, welcome
you to the Chair, Mrs. Dean. It is a pleasure to serve under
your chairmanship.
I thank the
hon. Member for North Cornwall for explaining the reasons for tabling
the amendment, and I acknowledge the points made by the hon. Member for
Bromley and Chislehurst.
Amendment 18
would mean that levying authorities in two-tier authorities, and the
Greater London authority, would have to serve notice on the billing
authorities in their area, regarding the arrangements that are to apply
for their BRS for the forthcoming financial year, before 1 January. In
practice, we would expect levying authorities to give notice earlier
than this to ensure that a BRS goes out with the rates bill.
A date of
before 1 January would be three months earlier than the date in the
Bill of 1 March. That March deadline was chosen for consistency with
the timetable for upper-tier authorities in the GLA to issue council
tax precepts for the forthcoming year, and with the budget setting
process. We are trying, therefore, to ensure that the arrangements for
BRS dovetail as far as possible with the existing administrative
arrangements, hence minimising the burden on both the levying and
billing
authorities. If
agreed to, the amendment would cause inconsistency because the BRS and
budget-setting/precept processes would be running to different
timetables. Also, levying authorities—including the
GLA—that intend to levy a BRS from 1 April 2010 could face
difficulties in the short to medium term in meeting the timetable
proposed by the amendment. The timetable is particularly tight
considering that, before the levying authority can notify the billing
authority, it will need to have prepared a prospectus, completed the
mandatory consultation and revised the proposals in response to the
consultation. I therefore respectfully ask the hon. Member for North
Cornwall to withdraw his
amendment. 9.45
am
Dan
Rogerson: I was interested to hear what the
Under-Secretary said about what would be expected of levying
authorities. However, the concern is that what is expected and what is
delivered may be two different things. The real reason lies in what he
said about Crossrail in his closing remarks. Once again we have hit on
an issue where the Bill has been drafted to meet the Crossrail
timetable but will have effects elsewhere across the country, which is
a grave concern.
The hon.
Member for Bromley and Chislehurst referred to issues with precepting
authorities. In my constituency there is a five-member parish council
where there was a dispute between two members and the other three. The
three resigned, making the parish council inquorate and no other people
could be found to serve with the two who remained. There was a problem
in setting a precept for that year, and this was quite a controversial
time in the parish. In the end, we managed by public meeting to find
some people willing to stand and resolved the
situation. I make that as an aside about the frustrations that billing
authorities can experience when dealing with other
authorities. I
have not heard a persuasive argument from the Under-Secretary as to why
we could not push the deadline back a bit further; we are talking about
potential applications of this Bill much wider than Crossrail. I am
concerned that, for example, where a ballot is to be held, if the
deadline for having all the regulations in place is the beginning of
March, that could allow extra leeway for the ballot to take place
later. If a deadline is pushed later there is sometimes less
impetus—less momentum to get things tied up and dealt with
earlier.
I am not
going to press this amendment to the vote because I think we have made
the point, but I hope that the Government will clearly signal their
intention in any reflections and advice they offer to local authorities
as to how a prospectus should be put together. Every effort must be
made to give as early an indication as possible to the billing
authority as to what is proposed and what is likely to occur, so that
we do not get the situation where a billing authority has to struggle
to deliver things on time for the BRS to be imposed in the financial
year. Amendment,
by leave, withdrawn.
Question
proposed, That the clause stand part of the
Bill.
Mr.
Khan: As we have discussed, in two-tier areas the
lower-tier authorities will act as the billing authority for the
purposes of BRS. Clause 18 sets out the requirements on levying
authorities in terms of notifying the lower-tier authorities in their
area of their intention to levy a BRS, so that billing arrangements can
be made in good time—and I hear the points made by the hon.
Member for North Cornwall.
The key
provisions in this clause are: subsection (1) requires levying
authorities intending to impose a supplement to give written notice to
each billing authority in their area; subsection (2) sets out the
information that must be contained in the notice; subsection (3)
specifies when the notice must be given and subsection (4)
explains the scope and content of notices where the levying authority
intends to impose more than one supplement in the
year. Question
put and agreed to.
Clause 18
accordingly ordered to stand part of the Bill.
Clause
19Notice
to billing authorities during financial
year Question
proposed, That the clause stand part of the
Bill.
Mr.
Khan: Clause 19 sets out the arrangements that apply where
a supplement is not to be levied and collected as part of the annual
non-domestic rating cycle and where a supplement is varied in
accordance with clause 10, with the result that new bills have to be
issued during the financial year. The clause requires levying
authorities to give notice to each billing authority
in their area of their BRS arrangements or the variation to their
arrangements. This notice must be in writing and, if it is the first
notice for the year, must contain the same information as a notice
under clause 18, which we have discussed, would. If the notice is being
issued as a result of a variation in an existing BRS, the levying
authority must also set out the variation and the day on which the
variation is to take
effect. The
key distinction between notices under clause 18 and clause 19 is that
notices under clause 19 will result in billing authorities incurring
extra costs because of billing outside the usual cycle. Accordingly,
clause 22, which we will come to, provides that levying authorities
must meet costs incurred by billing authorities in dealing with notices
under clause
19.
Robert
Neill: I understand what the Under-Secretary is saying and
I am grateful for the explanation. Perhaps, he can also undertake that
the guidance on these issues will take on board the point, raised by
the hon. Member for North Cornwall, about timely notice for such
notices, as well as for
others.
Mr.
Khan: I can give the hon. Gentleman that reassurance. The
points have been made very well—loud and
clear. Question
put and agreed
to. Clause
19 accordingly ordered to stand part of the
Bill.
Clause
20Calculations
for financial
year Question
proposed, That the clause stand part of the
Bill.
Mr.
Khan: The clause sets out which authority is responsible
for calculating the amount to be paid by each person liable to pay the
supplement. Subsection (1) requires billing authorities that
are also levying authorities to calculate the chargeable amount.
Subsection (2) applies the section to lower-tier billing
authorities that have been given notice by a levying authority under
clause 18 or 19. Subsection (3) requires lower-tier billing authorities
to calculate the chargeable amount payable by each liable person where
they have been given notice by a levying authority under clause 18 or
19. Subsection (4) disapplies the requirement under
subsection (3) on billing authorities to calculate the chargeable
amount in the case of a variation of a supplement, unless the variation
requires new calculations to be made. Subsection (5)
explains how calculations under this clause are to be made.
In developing
these proposals, the Government have ensured that the arrangements are
as consistent as possible with the current procedures for business
rates. That will minimise any additional burden on local
authorities. Question
put and agreed
to. Clause
20 accordingly ordered to stand part of the Bill.
Clause
21Collection
and
enforcement Question
proposed, That the clause stand part of the
Bill.
Mr.
Khan: The clause makes provisions for regulations to be
made setting out the collection and enforcement arrangements for BRS.
My right hon. Friend the Minister for Local Government has set out how
the Government intend to make use of these provisions in the statement
of intent. Subsection (1) enables regulations to be made for the
collection and enforcement of supplements. Subsection (2) provides for
the preparation of stand-alone regulations relating specifically to the
collection and enforcement of supplements, and also for the existing
regulations governing the collection and enforcement of non-domestic
rates to be amended so that they apply to supplements. Subsection (4)
confers a power to make regulations to address the collection and
enforcement of supplements where projects are abandoned. Subsection (3)
is not a regulation-making power; it gives the billing authorities a
power to collect and enforce payment of supplements once they have come
to an end. That is required to ensure that billing authorities can
collect the supplement from those ratepayers who have outstanding
liability. Question
put and agreed
to. Clause
21 accordingly ordered to stand part of the
Bill.
Clause
22Administrative
expenses Question
proposed, That the clause stand part of the
Bill.
Mr.
Khan: I would like take this opportunity to explain the
clause. It allows the Secretary of State and Welsh Ministers to make
regulations that make provision for billing authorities to retain a
proportion of the BRS revenue they collect to meet the expenses they
incur in collection or recovery—referred to in the Bill as
“administrative expenses”.
Where BRS is
collected as part of the annual billing round, the costs will be met
from the BRS revenue. Where billing authorities decide to levy the
supplement outside the normal non-domestic collection round, the costs
of collection will not come from the BRS revenue and will instead be
met by the levying authority. Options for how administrative expenses
should be calculated will be set out in the consultation paper that we
propose to issue shortly on our proposals for secondary
legislation. Mr.
Brian Binley (Northampton, South) (Con): It is a pleasure
to serve under your chairmanship, Mrs Dean. I have some concerns about
the clause. I preface my remarks by saying that I am very worried about
giving opportunity to any Government body to grab more money than they
need to have for a given project. I have already mentioned that parking
charges are now being used to supplement local government revenue
incomes, rather than to provide a service to local communities. I
am concerned that the same sort of thinking, in the less scrupulous of
our councils, might take place in this respect, too.
I have two
concerns on which I seek clarification, the first of which is about the
difference in billing. Subsection (1) makes it clear that
the billing authority has the ability to recover moneys for
administrative costs from the moneys collected through the BRS project.
However, the clause then states that the authority can do that only if
the information is given prior to the beginning of the financial year,
and it seems from the impact assessment that when billing is undertaken
as a separate exercise, the cost of collection will be met from the
upper-tier authority’s own resources. So, if there is good
notice for collection to be made as part of the normal collection of
rates, it is the billing authority’s right to take those costs
out before it hands the money back to the levying authority. If,
however, the levying authority does not ask for a rate until after the
beginning of the financial year, it seems that that cost falls on the
upper-tier authority’s own revenue budget. Therein lie the sort
of caveats that concern me—such as the ability to raise money
that is not properly controlled and not transparently projected, but
which adds to local authorities’ income streams.
First, will
the Minister clear up the issue of those two ways of charging for the
collection process? Secondly, how will we be assured, bearing it in
mind that money might be coming from the general revenue budget of a
given levying authority, that that money will be properly and
transparently accounted for, so that people can have faith that money
is not being leaked out into other budget areas for purposes
not directly ascribed by the
Bill?
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